An FI That Finances Long-Term Fixed Rate Mortgages with Short-Term

question 35

Multiple Choice

An FI that finances long-term fixed rate mortgages with short-term deposits is exposed to

• A)increases in net interest income and decreases in the market value of equity when interest rates fall.
• B)decreases in net interest income and decreases in the market value of equity when interest rates fall.
• C)decreases in net interest income and decreases in the market value of equity when interest rates rise.
• D)increases in net interest income and decreases in the market value of equity when interest rates rise.
• E)increases in net interest income and increases in the market value of equity when interest rates rise.

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Definitions:

Promoter Region

A region of DNA that initiates transcription of a particular gene, essential for gene expression regulation.

Peptide Bond Formation

A biochemical process that involves the joining of two amino acids through a covalent bond between the amino group of one and the carboxyl group of the other, releasing a molecule of water.

tRNA

Transfer RNA; a type of RNA molecule that helps decode a messenger RNA (mRNA) sequence into a protein during the process of translation in protein synthesis.

Ribosome

Molecular machines within cells that synthesize proteins by translating the information contained in messenger RNA.